Offer for Clydeport

Peel Hldgs PLC 18 November 2002 18 November 2002 Embargoed until 7:00 a.m. 18 November 2002 Not for release, publication or distribution in or into the USA, Canada, Australia or Japan. This summary should be read in conjunction with the text of the full announcement. Peel Holdings p.l.c. Recommended Cash Offer by Rothschild on behalf of Peel Ports Limited (a subsidiary of Peel Holdings p.l.c.) for Clydeport plc Summary The Directors of Peel Holdings and Clydeport announce that they have reached agreement on the terms of a recommended cash offer to be made by Rothschild on behalf of Peel for the entire issued and to be issued share capital of Clydeport not already owned by the Peel Group. The Offer will be at 440 pence in cash for each Clydeport Share which values the existing issued share capital of Clydeport at approximately Â£184.4 million. The Offer will include a Loan Note Alternative for Clydeport Shareholders except for those in certain overseas jurisdictions. The Offer represents a premium of approximately 20.9 per cent. over the Closing Price of 364 pence per Clydeport Share on 15 November 2002 (the last dealing day before this announcement). Peel Holdings already owns 3,384,000 Clydeport Shares and Peel has received irrevocable commitments to accept or to procure acceptance of the Offer in respect of 325,518 Clydeport Shares. Accordingly, the Peel Group owns or has received undertakings to accept or to procure acceptance of the Offer in respect of a total of 3,709,518 Clydeport Shares, representing approximately 8.9 per cent. of the Clydeport Shares currently in issue. Commenting on the Offer, Mr John Whittaker, Chairman of Peel Holdings p.l.c., said today: 'I am delighted to be announcing this Offer today. The proposed acquisition presents exciting opportunities for both groups. It should enable Peel Holdings to expand its port operations with the benefit of Clydeport's management experience. Peel Holdings will also be able to provide support and assistance to Clydeport's property development activities.' James Millar CBE, Chairman of Clydeport plc, said today: 'The Offer provides Clydeport Shareholders with an opportunity to realise their investment after a period of substantial growth. It represents a significant premium over the current share price and, in difficult markets, provides Clydeport Shareholders with delivery of certain value as against the risks of the delivery of future benefits. Both the ports and property activities of Clydeport should be strengthened by the acquisition.' Press Enquiries: Peel Holdings / Peel 0161 629 8200 Mr John Whittaker Mr Peter Scott Rothschild 0161 827 3800 Mr Richard Bailey Mr Andrew Simpson Clydeport 0141 221 8733 Mr James Millar CBE Deloitte & Touche Corporate Finance 0141 304 5673 Mr David Shearer or Mr Robin Binks Brewin Dolphin 0141 221 7733 Mr Jamie Matheson The Big Partnership - Glasgow 0141 333 9585 (PR advisers to Clydeport) Mr Alex Barr Beattie Financial - London 020 7398 3300 (PR advisers to Clydeport) Ms Ann-marie Wilkinson Rothschild, which is regulated in the UK by the FSA, is acting for Peel and Peel Holdings and for no one else in connection with the Offer and will not be responsible to anyone other than Peel and Peel Holdings for providing the protections afforded to customers of Rothschild nor for giving advice in relation to the Offer. Deloitte & Touche Corporate Finance is acting for Clydeport and for no one else in connection with the Offer and will not be responsible to anyone other than Clydeport for providing the protections afforded to clients of Deloitte & Touche Corporate Finance or for giving advice in relation to the Offer. Deloitte & Touche Corporate Finance is a division of Deloitte & Touche which is authorised by the FSA in respect of regulated activities. Brewin Dolphin Securities Limited, which is regulated in the UK by the FSA, is acting for Clydeport and for no one else in connection with the Offer and will not be responsible to anyone other than Clydeport for providing the protections afforded to customers of Brewin Dolphin Securities Limited or for giving advice in relation to the Offer or any other matter referred to in this announcement. The Offer (including the Loan Note Alternative) is not being made, directly or indirectly, in or into, or by use of the mails, or any means or instrumentally (including, without limitation, facsimile or electronic transmission, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange of, the USA, Canada, Australia or Japan and the Offer cannot be accepted by any such use, means, instrumentality or facility or from within the USA, Canada, Australia or Japan. The Loan Notes have not been, and will not be, listed on any stock exchange and have not been, and will not be, registered under the United States Securities Act of 1933 (as amended) nor under the relevant securities laws of any province or territory of Canada, Australia or Japan. The Loan Notes may not be offered, sold, transferred or delivered, directly or indirectly, in or into the USA, Canada, Australia or Japan. The availability of the Offer and/or the Loan Note Alternative to Clydeport Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Clydeport Shareholders who are not so resident should inform themselves about and observe such applicable requirements. The full terms and conditions of the Offer (including details of how the Offer may be accepted) will be set out in the Offer Document and the Form of Acceptance accompanying the Offer Document. Clydeport Shareholders who accept the Offer may only rely on the Offer Document and the Form of Acceptance as setting out the full terms and conditions of the Offer. In deciding whether or not to accept the Offer in respect of their Clydeport Shares, Clydeport Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the Form of Acceptance. Clydeport Shareholders are strongly advised to read the Offer Document because it will contain important information. The directors of Peel accept responsibility for the information contained in this announcement other than that relating to Peel Holdings, the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Peel Holdings accept responsibility for the information contained in this announcement other than that relating to the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Clydeport accept responsibility for the information contained in this announcement relating to the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. Words and expressions used in this summary are defined in the full announcement. 18 November 2002 Embargoed until 7:00 a.m. 18 November 2002 Not for release, publication or distribution in or into the USA, Canada, Australia or Japan. Peel Holdings p.l.c. Recommended Cash Offer by Rothschild on behalf of Peel Ports Limited (a subsidiary of Peel Holdings p.l.c.) for Clydeport plc 1. Introduction The boards of Clydeport and Peel Holdings announce the terms of a recommended cash offer, to be made by Rothschild on behalf of Peel, a subsidiary of Peel Holdings, for the entire issued and to be issued share capital of Clydeport not already owned by the Peel Group. The offer will be at 440 pence in cash for each Clydeport Share, which values the existing issued share capital of Clydeport at approximately Â£184.4 million. The Offer will include a Loan Note Alternative for Clydeport Shareholders except for those in certain overseas jurisdictions. The Offer represents a premium of approximately 20.9 per cent. over the Closing Price of 364 pence per Clydeport Share on 15 November 2002 (the last dealing day before this announcement). Appendix V contains the definitions used in this announcement. 2. The Offer The Offer, which will be on the terms and subject to the conditions set out or referred to in Appendix I to this announcement and the further terms to be set out in the Offer Document and the Form of Acceptance, will be made on the basis set out below: for each Clydeport Share 440 pence in cash The Offer values the entire issued ordinary share capital of Clydeport at approximately Â£184.4 million. The Peel Group already owns 3,384,000 Clydeport Shares. The Offer extends to all Clydeport Shares unconditionally allotted or issued and fully paid on the date of the Offer other than those Clydeport Shares which are already owned by the Peel Group. The Offer also extends to any Clydeport Shares which are unconditionally allotted or issued and fully paid while the Offer remains open for acceptance (or by such earlier date as Peel may, subject to the City Code, decide) including any Clydeport Shares which are so unconditionally allotted or issued and fully paid pursuant to the exercise of options granted under the Clydeport Share Option Schemes. The Clydeport Shares which are the subject of the Offer will be acquired by Peel fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests of any nature whatsoever and together with all rights now or in the future attaching to them, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement. The Offer is subject, amongst other things, to certain regulatory and other conditions, as detailed in Appendix I to this announcement. 3. Irrevocable Undertakings and existing holdings Peel has received irrevocable undertakings from the Clydeport Directors to accept, or to procure the acceptance of, the Offer in respect of their entire beneficial holdings of 43,518 Clydeport Shares, representing approximately 0.1 per cent. of the Clydeport Shares currently in issue. Peel has also received irrevocable undertakings to accept the Offer from Tokenhouse Investments SRBP (of which John Whittaker is a trustee) and Peter Scott, in respect of their entire holdings of 275,000 and 7,000 Clydeport Shares, respectively. These undertakings will remain binding even in the event of a higher competing offer being made for Clydeport. In aggregate, therefore, Peel has received undertakings to accept, or to procure the acceptance of, the Offer in respect of 325,518 Clydeport Shares, representing approximately 0.8 per cent. of the Clydeport Shares currently in issue. Peel Holdings, the parent company of Peel, already owns 3,384,000 Clydeport Shares. Accordingly, the Peel Group owns, or has received undertakings to accept, or to procure acceptance of, the Offer in respect of a total of 3,709,518 Clydeport Shares, representing approximately 8.9 per cent. of the Clydeport Shares currently in issue. Each of Peel Holdings, Tokenhouse Investments SRBP and Peter Scott is a person acting in concert with Peel for the purposes of the Offer. 4. Recommendation The Clydeport Directors, who have been so advised by Brewin Dolphin, consider the terms of the Offer to be fair and reasonable. The Clydeport Directors have also been advised by Deloitte & Touche Corporate Finance, a division of Deloitte & Touche. Deloitte & Touche is auditor to Peel and, as a consequence of Rule 3 of the City Code, Deloitte & Touche Corporate Finance is not acting as independent adviser for the purpose of the Offer. Deloitte & Touche Corporate Finance also consider the terms of the Offer to be fair and reasonable. In providing advice to the Clydeport Directors, Brewin Dolphin and Deloitte & Touche Corporate Finance have taken into account the commercial assessments of the Clydeport Directors. Accordingly, the Clydeport Directors are unanimously recommending that Clydeport Shareholders accept the Offer, as they themselves have irrevocably undertaken to do in respect of their entire beneficial holdings comprising 43,518 Clydeport Shares in aggregate, representing approximately 0.1 per cent. of Clydeport's existing issued share capital. 5. The Loan Note Alternative Clydeport Shareholders, other than certain Overseas Shareholders, who validly accept the Offer may elect to receive Loan Notes to be issued by Peel instead of some or all of the cash consideration to which they would otherwise be entitled under the Offer. The Loan Note Alternative will be made available on the following basis: for every Â£1.00 of cash consideration Â£1.00 nominal of Loan Notes The issue of the Loan Notes will be conditional on the Offer becoming or being declared unconditional in all respects . The Loan Notes to be issued under the Offer will be issued, credited as fully paid, in amounts and integral multiples of Â£1.00 nominal amount. Fractional entitlements to Loan Notes will be disregarded and will not be issued to persons accepting the Offer. The Loan Notes will, subject to certain restrictions, be transferable, but no application will be made for them to be listed or dealt in on any stock exchange. A maximum of Â£131,000,000 in nominal value of Loan Notes will be available to be issued under the Loan Note Alternative. To the extent that valid elections for the Loan Notes exceed the maximum available, such elections shall be scaled back pro rata as nearly as practicable, according to the number of shares for which a Loan Note election has been made. The Loan Note Alternative will initially remain open for acceptance until 3.00 p.m. on 9 December 2002, the first closing date of the Offer. If the Offer becomes or is declared unconditional as to acceptances by reference to acceptances received at or before that time, the Loan Note Alternative will remain open for acceptance for a further period of 14 days, but will then be closed. If the Offer does not become or is not declared unconditional as to acceptances by reference to acceptances received at or before that time, Peel reserves the right to extend the period for acceptance of the Loan Note Alternative or to close the Loan Note Alternative. Payment of the principal amount of the Loan Notes (but not any interest) will be guaranteed by RBS. The Loan Notes will bear interest, payable in arrears, up to and including the date of payment (less any tax required to be deducted or withheld therefrom) every six months on 31 December and 30 June in each year, at a rate per annum calculated by Peel, equal to 0.5 per cent. below LIBOR. The first payment will be made on the date which is the first 31 December or 30 June to fall on or after the expiry of three months from the first date of issue of any of the Loan Notes in respect of the period from (but excluding) the date of issue of the Loan Notes up to and including the relevant payment date. The Loan Notes will be redeemable by a Loan Note holder in whole or in part on any interest payment date falling six months or more after the date of their issue and will be redeemed in whole by Peel, to the extent then still outstanding, on the fifth anniversary of the date the Offer becomes or is declared wholly unconditional. The Loan Notes have not been and will not be registered under the Securities Act, nor under the relevant securities laws of any province or territory of Canada, Australia or Japan. Accordingly, the Loan Notes may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into the USA, Canada, Australia or Japan. Rothschild has advised that, based on market conditions on 15 November 2002 (the last dealing day prior to the date of this announcement), in its opinion, if the Loan Notes had been in issue on that date, the estimated value of the Loan Notes would have been not less than 99p per Â£1 in nominal value. 6. Financing of the Offer Peel has arranged new debt facilities of up to Â£156 million provided by RBS in order to assist towards financing the consideration due and payable under the Offer. A summary of the terms of the new facilities will be included in the Offer Document. 7. Background to, and reasons for, the Clydeport Directors recommending the Offer Over the past five financial years, Clydeport Group's management team has been responsible for a substantial improvement in the profitability of the Clydeport Group. In the five years ended 31 December 2001, the Clydeport Group's profit before tax has more than trebled and dividends per share have increased by 119 per cent. From 1 January 1997 to 15 November 2002 (the last dealing day before the publication of this document), Clydeport's share price has risen by 133 per cent. This rise is significantly higher than those for the other UK listed port companies and indeed, the stock market as a whole, as reflected in the FTSE All-Share Index, which fell 3 per cent. in the same period. Each year the Clydeport Board conducts a strategic review to identify routes that could be adopted to maintain a significant level of growth. Within the ports business, the Clydeport Board concluded that the high level of growth could be sustained only by acquisition or merger. After the Peel Group had acquired a significant holding in Clydeport, it was an obvious route to explore with them whether some greater level of association could work to the benefit of both companies. A concept of some form of merger presented clear benefits. Peel Holdings' wholly owned subsidiary, the Manchester Ship Canal Company ('MSC'), has two of the same principal activities as Clydeport, i.e. ports and property. By mutual assent, Clydeport's all-round management in the ports sector is likely to enhance the Peel Group's ports activities and profitability. In property, the Peel Group has the experience of successfully bringing to fruition large-scale multi-faceted developments and would be able to bring that experience to bear on Clydeport's property interests, including the Glasgow Harbour joint venture with Bank of Scotland. The respective corporate skills are a clear complementary match. Founded on this operational rationale, several corporate structures have been examined. Peel Holdings concluded that the surest route for it to achieve these commercial benefits would be for Peel to acquire Clydeport and that it would submit an offer. Both the ports and property activities of Clydeport should be strengthened by the acquisition. Clydeport's management will take a lead role in the combined ports business, and will continue the existing property development activity within Scotland, with the benefit of input from Peel. Peel is enthusiastic towards the major Clydeside restructuring embodied in Glasgow Harbour. It is intended that Clydeport's existing head office in Glasgow will be the headquarters for the Clydeport and MSC businesses. Peel and Peel Holdings have confirmed that the existing employment rights, including pension rights, of all of Clydeport's executive directors, management and employees will be fully safeguarded. In view of the success of the Clydeport management over the last five years, the decision to recommend the Offer has been particularly difficult for the Clydeport Board. Its instinctive reaction was to believe that Clydeport Shareholders' interests would be best served by an independent Clydeport under its existing management team. However, the Offer provides Clydeport Shareholders with an opportunity to realise their investment after a period of substantial growth and at a point when, without acquisition or merger within the ports business, there is a greater uncertainty surrounding the rate of future growth. Furthermore, the property development at Glasgow Harbour is at an early stage in a long term project with significant additional investment required to bring it to fruition. The cash offer of 440 pence per share represents a significant premium over the current market price and in difficult markets provides Clydeport Shareholders with delivery of certain value as against the risks of the delivery of future benefits. Accordingly, after full consideration of all relevant factors, the Clydeport Board has come to the unanimous conclusion that the Offer should be recommended to Clydeport Shareholders. 8. Background to, and reasons for, Peel making the Offer The principal activities of the Peel Group are property investment, property development and trading, the operation of a major regional shopping centre and leisure complex at the Trafford Centre in Manchester, the operation of Liverpool John Lennon Airport and, through ownership of the Manchester Ship Canal, a regional port. The Peel Group has wanted to expand its existing port operations, which comprise part of the Manchester Ship Canal business, and has been looking for suitable opportunities in this sector. The Clydeport Group is an established port operator with property holdings based on the West Coast of Scotland. The Peel Group believes that there is a natural fit between the groups, as the Clydeport Group has particular expertise in port operations and the Peel Group has particular expertise in property development. In recent years, the Peel Group has made considerable investment in upgrading the capacity of the Manchester Ship Canal and its associated port and dock facilities and now believes that the Peel Group would benefit from the expertise and experience of Clydeport's management team in managing a combined ports business. In addition, economies of scale may be achieved from combining the Clydeport Group with the Peel Group's port division. Peel Holdings believes that it can bring its group's significant property development skills and expertise to assist in Clydeport's Glasgow Harbour project, which is held through a joint venture between the Clydeport Group and BoS. This development project is at an early stage and will require significant funding, marketing and phasing over a long time frame to bring it to fruition. Peel believes that the combination of its group's experience of similar developments and greater financial resources will maximise the likelihood of success for this project. 9. Information on the Clydeport Group Clydeport is a UK port operator and property investment and development group with operations focused in Scotland. For the year ended 31 December 2001, the Clydeport Group's operating profit, including from Joint Ventures, was Â£15.8 million (2000 (restated): Â£11.5 million) on turnover of Â£41.4 million (2000: Â£34.2 million), with earnings per share of 32.0p (2000 (restated): 24.6p) and dividends per share of 10.5p (2000: 8.6p). For the six months ended 30 June 2002, the Clydeport Group's operating profit, including from Joint Ventures, was Â£5.2 million (2001 (restated): Â£7.0 million) on turnover of Â£17.7 million (2001: Â£18.7 million), with earnings per share of 10.1p (2001 (restated): 13.8p) and dividends per share of 3.4p (2001: 3.0p). Shareholders' funds at 30 June 2002 were Â£66.4 million and net cash was Â£19.0 million. 10. Current trading and profit forecast for the Clydeport Group On 3 September 2002, Clydeport announced its interim results for the six months to 30 June 2002. In this announcement, James Millar CBE, Clydeport's Chairman, commented: 'The results for the first six months of this financial year were in line with expectations and we have increased our dividend to reflect our confidence in the full year. We expect to see higher levels of activity across all our businesses in the second half of the year, particularly from Hunterston and property development.' The Clydeport Directors forecast that the profit before tax of the Clydeport Group for the year ending 31 December 2002 will be not less than Â£18 million, in the absence of unforeseen circumstances and on the bases and assumptions set out in Appendix III of this announcement. Included in these assumptions is reference to certain changes within the power generation industry which, whilst unlikely to impact on the Board's forecast for 2002, may have longer term implications for the Clydeport Group's coal handling business at Hunterston. Further information on this profit forecast including certain reports on it is reproduced in Appendix III to this announcement. 11. Valuation of investment and development properties In view of the significance of the Clydeport Group's property assets, before deciding whether to recommend the Offer or not, the Clydeport Board commissioned James Barr and Montagu Evans to estimate the current Open Market Value ('OMV') of both the Clydeport Group's investment and development properties and its share of the OMV of such properties held by Joint Ventures (which includes GHL) *. Because of the scale of Glasgow Harbour, the Clydeport Board has, in addition, commissioned Montagu Evans to estimate Clydeport's interest in the Calculation of Worth ('CoW') of that development. Details of the property valuations, including detailed definitions of OMV and CoW, are set out in Appendix IV. * Excluding Clydeport's investment in an investment property which was purchased by Clydeport on 23 October 2002. 12. Information on Peel Group and current trading Peel Holdings is a UK based company whose shares are traded on the Alternative Investment Market. The operations of the Peel Group are more fully described in paragraph 8 above. For the year ended 31 March 2002, Peel Group's operating profit before exceptional items was Â£90.3 million (2001 (restated): Â£84.8 million) on turnover of Â£146.8 million (2001 (restated): Â£140.8 million), with earnings per share of 34.7p (2001 (restated): 51.7p) and dividends per share of 15.0p (2001: 15.0p). Shareholders' funds at 31 March 2002 were Â£755.6 million (2001: Â£747.4 million). As at 31 March 2002, Peel Group's net debt was Â£865.3 million. Trading for the Peel Group since 31 March 2002 has been satisfactory and in line with the Peel Holdings board's expectations. 13. Clydeport management and employees The skills and experience of existing management and employees of Clydeport are important factors to Peel in making its decision to make the Offer. Accordingly, Peel and Peel Holdings have each confirmed that the existing employment rights, including pension rights, of the executive directors, management and employees of Clydeport will be fully safeguarded. 14. Clydeport Share Option Schemes The Offer extends to any Clydeport Shares issued or unconditionally allotted prior to the date on which the Offer closes (or such earlier date as Peel may, subject to the City Code, decide) as a result of the exercise of options granted under the Clydeport Share Option Schemes. To the extent that such options have not been exercised in full by the time the Offer becomes or is declared unconditional in all respects, appropriate proposals will be made to the holders of options under the Clydeport Share Option Schemes. 15. Compulsory acquisition, de-listing and cancellation of trading If Peel receives acceptances under the Offer in respect of, or otherwise acquires, 90 per cent. or more of the Clydeport Shares to which the Offer relates, Peel intends to exercise its rights pursuant to the provisions of sections 428 to 430F of the Act compulsorily to acquire the remaining Clydeport Shares. Furthermore, once the Offer becomes or is declared unconditional in all respects, Peel intends to procure that Clydeport makes an application to the UKLA for the cancellation of the listing of Clydeport Shares on the Official List and to the London Stock Exchange for the cancellation of trading in Clydeport Shares. It is expected that such cancellations will take effect no earlier than 20 business days after the date on which the Offer becomes or is declared unconditional in all respects. The cancellation of the listing of Clydeport Shares will significantly reduce the liquidity and marketability of any Clydeport Shares not assented to the Offer and their value may be affected in consequence. 16. General The formal Offer Document setting out the details of the Offer is expected to be posted to Clydeport Shareholders and (for information only) to participants in the Clydeport Share Option Schemes today. The conditions and certain further terms of the Offer are set out in Appendix I and will be set out in full in the Offer Document and in the Form of Acceptance. The availability of the Offer (including the Loan Note Alternative) to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. In particular, as described in Appendix I, the Offer will not be made directly or indirectly into the USA, Canada, Australia or Japan. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. Further details in relation to overseas shareholders will be contained in the Offer Document. The sources and bases for certain information contained in this announcement are set out in Appendix II. Save for the disclosure of interests in paragraph 3 above, neither Peel nor, so far as the Directors of Peel are aware, any person acting in concert with it owns or controls any Clydeport Shares or any securities convertible or exchangeable into Clydeport Shares or any rights to subscribe for or purchase, or options in respect of, or derivatives referenced to, any such shares ('Relevant Clydeport Securities') nor does any such person have any arrangement in relation to Relevant Clydeport Securities. For these purposes, 'arrangement' includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Clydeport Securities which may be an inducement to deal or refrain from dealing in such securities. In view of the requirement for confidentiality, Peel has not made enquiries at this stage in this respect of certain persons who may be deemed by the City Code to be acting in concert with it for the purposes of the Offer. The full terms and conditions of the Offer (including details of how the Offer may be accepted) will be set out in the Offer Document and the Form of Acceptance accompanying the Offer Document. Clydeport Shareholders who accept the Offer may only rely on the Offer Document and the Form of Acceptance as setting out the full terms and conditions of the Offer. In deciding whether or not to accept the Offer in respect of their Clydeport Shares, Clydeport Shareholders should rely only on the information contained, and procedures described, in the Offer Document and Form of Acceptance. Press Enquiries: Peel Holdings / Peel 0161 629 8200 Mr John Whittaker Mr Peter Scott Rothschild 0161 827 3800 Mr Richard Bailey Mr Andrew Simpson Clydeport 0141 221 8733 Mr James Millar CBE Deloitte & Touche Corporate Finance 0141 304 5673 Mr David Shearer or Mr Robin Binks Brewin Dolphin 0141 221 7733 Mr Jamie Matheson The Big Partnership - Glasgow 0141 333 9585 (PR advisers to Clydeport) Mr Alex Barr Beattie Financial - London 020 7398 3300 (PR advisers to Clydeport) Ms Ann-marie Wilkinson Rothschild, which is regulated in the UK by the FSA, is acting for Peel and Peel Holdings and for no one else in connection with the Offer and will not be responsible to anyone other than Peel and Peel Holdings for providing the protections afforded to customers of Rothschild nor for giving advice in relation to the Offer. Deloitte & Touche Corporate Finance is acting for Clydeport and for no one else in connection with the Offer and will not be responsible to anyone other than Clydeport for providing the protections afforded to clients of Deloitte & Touche Corporate Finance or for giving advice in relation to the Offer. Deloitte & Touche Corporate Finance is a division of Deloitte & Touche which is authorised by the FSA in respect of regulated activities. Brewin Dolphin Securities Limited, which is regulated in the UK by the FSA, is acting for Clydeport and for no one else in connection with the Offer and will not be responsible to anyone other than Clydeport for providing the protections afforded to customers of Brewin Dolphin Securities Limited or for giving advice in relation to the Offer or any other matter referred to in this announcement. The Offer (including the Loan Note Alternative) is not being made, directly or indirectly, in or into, or by use of the mails, or any means or instrumentally (including, without limitation, facsimile or electronic transmission, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange of, the USA, Canada, Australia or Japan and the Offer cannot be accepted by any such use, means, instrumentality or facility or from within the USA, Canada, Australia or Japan. The Loan Notes have not been, and will not be, listed on any stock exchange and have not been, and will not be, registered under the United States Securities Act of 1933 (as amended) nor under the relevant securities laws of any province or territory of Canada, Australia or Japan. The Loan Notes may not be offered, sold, transferred or delivered, directly or indirectly, in or into the USA, Canada, Australia or Japan. The availability of the Offer and/or the Loan Note Alternative to Clydeport Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Clydeport Shareholders who are not so resident should inform themselves about and observe such applicable requirements. The full terms and conditions of the Offer (including details of how the Offer may be accepted) will be set out in the Offer Document and the Form of Acceptance accompanying the Offer Document, which is expected to be posted to Clydeport Shareholders today. Clydeport Shareholders who accept the Offer may only rely on the Offer Document and the Form of Acceptance as setting out the full terms and conditions of the Offer. In deciding whether or not to accept the Offer in respect of their Clydeport Shares, Clydeport Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the Form of Acceptance. Clydeport Shareholders are strongly advised to read the Offer Document because it will contain important information. The directors of Peel accept responsibility for the information contained in this announcement other than that relating to Peel Holdings, the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Peel Holdings accept responsibility for the information contained in this announcement other than that relating to the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Clydeport, accept responsibility for the information contained in this announcement relating to the Clydeport Group, the directors of Clydeport and members of their immediate families, related trusts and persons connected with them (within the meaning of section 346 of the Act). To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained herein for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. APPENDIX I Conditions of the Offer The Offer will be subject to the following conditions: (a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by 3.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as Peel may determine, subject to the rules of the City Code) in respect of not less than 90 per cent. (or such lesser percentage as Peel may decide) in nominal value of the Clydeport Shares to which the Offer relates, provided that this condition will not be satisfied unless Peel shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Clydeport Shares carrying, in aggregate, more than 50 per cent. of the voting rights then exercisable at a general meeting of Clydeport, including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any Clydeport Shares which are unconditionally allotted fully paid before the Offer becomes or is declared unconditional as to acceptances (whether pursuant to the exercise of any outstanding conversion, option or subscription rights or otherwise). For the purposes of this condition: (i) Clydeport Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue; and (ii) the expression 'Clydeport Shares to which the Offer relates' shall be construed in accordance with Sections 428 to 430F of the Act; (b) no government or governmental, quasi-governmental, supranational, statutory, regulatory or investigative body, authority, court, trade agency, association or institution or professional or environmental body or any other similar person or body whatsoever in any relevant jurisdiction (each a 'Third Party') having taken, instituted, implemented or threatened any action, proceedings, suit, investigation, enquiry or reference or having required any action to be taken (and in each case not having irrevocably withdrawn the same) or having made, proposed or enacted any statute, regulation, order or decision or having done anything which would or might reasonably be expected to: (i) make the Offer or its implementation, or the acquisition or the proposed acquisition by Peel of any shares in, or control of, Clydeport or any of its subsidiaries or subsidiary undertakings or associated undertakings (including any joint venture, partnership, firm or company in which any member of the Clydeport Group is substantially interested) (the 'wider Clydeport Group' (and ' member of the wider Clydeport Group' shall be construed accordingly)) by Peel void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly materially restrain, prohibit, materially restrict, prevent or materially delay the same or impose additional materially adverse conditions or financial or other obligations with respect thereto, or otherwise challenge or interfere therewith to a material extent; (ii) require, prevent or materially delay the divestiture by Peel Holdings or any of its subsidiaries or subsidiary undertakings or associated undertakings (including any joint venture, partnership, firm or company in which any member of the Peel Group is substantially interested) (the 'wider Peel Group' (and ' member of the wider Peel Group' shall be construed accordingly)) of any Clydeport Shares or of any shares in a member of the wider Clydeport Group; (iii) require, prevent or delay the divestiture by any member of the wider Peel Group or by any member of the wider Clydeport Group of all or any portion of their respective businesses, assets or property, or impose any limit on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof (and which in any such case is material in the context of the Offer or the wider group concerned taken as a whole); (iv) impose any limitation on, or result in any delay in, the ability of any member of the wider Peel Group or any member of the wider Clydeport Group to acquire, hold or exercise effectively, directly or indirectly, all or any rights of ownership of Clydeport Shares or any shares or securities convertible into Clydeport Shares or to exercise management control over any member of the wider Clydeport Group or any member of the wider Peel Group and which in any such case is material in the context of the wider Clydeport Group or the Offer; (v) require any member of the wider Peel Group and/or of the wider Clydeport Group to acquire or offer to acquire or repay any shares or other securities in and/or indebtedness of any member of the wider Clydeport Group owned by any Third Party in circumstances which would impose on Peel or any member of the Clydeport Group a liability which is material in the context of the Offer; (vi) impose any limitation on the ability of any member of the wider Peel Group and/or of the wider Clydeport Group to integrate its business, or any part of it, with the business of any member of the wider Clydeport Group or of the wider Peel Group respectively (in each case, to an extent which is material in the context of the Offer); or (vii) otherwise adversely affect any or all of the businesses, assets, profits or financial or trading position of any member of the wider Clydeport Group or any member of the wider Peel Group to an extent which is material in the context of the Offer or any such wider group taken as a whole; and all applicable waiting and other time periods during which any Third Party could institute, implement or threaten any such action, proceedings, suit, investigation, enquiry or reference under the laws of any relevant jurisdiction, having expired, lapsed or been terminated; (c) all filings and applications having been made and all necessary waiting and other time periods (including extensions thereof) under any applicable legislation or regulations of any relevant jurisdiction having expired, lapsed or been terminated and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case as may be material and necessary in connection with the Offer and its implementation or the acquisition or proposed acquisition by Peel of any shares in, or control of, Clydeport or any member of the wider Clydeport Group and all authorisations, orders, recognitions, grants, consents, clearances, confirmations, licences, certificates, permissions and approvals ('Authorisations') which are material and necessary or deemed appropriate by Peel, acting reasonably, for, or in respect of, the Offer or the proposed acquisition by Peel of any shares in, or control of, Clydeport or for the carrying on by any member of the wider Clydeport Group of its business or in relation to the affairs of any member of the wider Clydeport Group having been obtained in terms and in a form satisfactory to Peel, acting reasonably, from all appropriate Third Parties or persons with whom any member of the wider Clydeport Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke, suspend, restrict or amend or not renew the same (in consequence of the Offer or otherwise) immediately prior to the time at which the Offer becomes or is declared wholly unconditional; (d) except as publicly announced by Clydeport prior to 18 November 2002 through the Company Announcements Office of the London Stock Exchange or an appropriate regulatory information service or as disclosed by or on behalf of Clydeport to Peel or its advisers in writing, there being no provision of any arrangement, agreement, licence or other instrument to which any member of the wider Clydeport Group is a party, or by or to which any such member, or any of its respective assets, is or are or may be bound, entitled or subject or any circumstance which, in consequence of the making or implementation of the Offer or the proposed acquisition of any shares in, or control of, Clydeport by Peel or because of a change in the control or management of Clydeport or otherwise, could reasonably be expected to result in: (i) any indebtedness or liability (actual or contingent) of, or any grant made available or available to, any member of the wider Clydeport Group that are material in the context of such group being or becoming repayable or unavailable or capable of being declared repayable or unavailable immediately or prior to its stated maturity or the ability of any such member to incur any such indebtedness or receive such grant being (as appropriate) withdrawn or inhibited or becoming capable of being withdrawn or inhibited; (ii) the creation, becoming enforceable or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the wider Clydeport Group (which is material in the context of the Offer or the wider Clydeport Group taken as a whole); (iii) any such arrangement, agreement, licence or instrument or the rights, liabilities, obligations, or interests of any member of the wider Clydeport Group under any such arrangement, agreement, licence or instrument (or any agreement, licence, instrument or arrangement, relating to any such right, liability, obligation, interest or business) or the interests or business of any such member in or with any other person, firm, company or body being or becoming capable of being terminated or adversely modified or adversely affected or any adverse action being taken or any onerous obligation arising thereunder to an extent which, in any such case, is material in the context of the wider Clydeport Group taken as a whole, or the Offer, as the case may be; (iv) any asset or interest of any member of the wider Clydeport Group being or falling to be disposed of or charged (otherwise than in the ordinary course of business) or ceasing to be available to any member of the wider Clydeport Group or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the wider Clydeport Group; (v) any member of the wider Clydeport Group ceasing to be able to carry on business under any name under which it presently does so to any material extent in the context of the wider Clydeport Group taken as a whole; (vi) any member of the wider Peel Group and/or of the wider Clydeport Group being required to acquire or repay any shares in and/or indebtedness of any member of the wider Clydeport Group owned by any Third Party in circumstances which would impose on such member a liability which is material in the context of the wider Peel Group, or the wider Clydeport Group taken as a whole, or the Offer, as the case may be; (vii) any change in or effect on the ownership or use of any intellectual property rights material in the context of the wider Clydeport Group taken as a whole owned or used by any member of the wider Clydeport Group; (viii) the financial or trading position of any member of the wider Clydeport Group being adversely prejudiced or affected to an extent which is material in the context of the Offer, or the wider Clydeport Group taken as a whole; or (ix) the creation of any liability, actual or contingent, which is material in the context of the Offer, or the wider Clydeport Group taken as a whole, by any such member; and no event having occurred which, under any provision of any arrangement, agreement or other instrument to which any member of the wider Clydeport Group is a party, or by or to which any such member, or any of its assets, is bound, entitled or subject, might reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (ix) inclusive of this paragraph; (e) except as disclosed in Clydeport's annual report and accounts for the year ended 31 December 2001 or the statement of its interim results for the six months ended 30 June 2002 or as disclosed in writing by or on behalf of Clydeport to Peel or its advisers prior to 18 November 2002 or as otherwise publicly announced by Clydeport on or prior to 18 November 2002 through the Company Announcements Office of the London Stock Exchange or any other appropriate regulatory information service, no member of the wider Clydeport Group having since 30 June 2002: (i) issued or agreed to issue or authorised or proposed the issue of additional shares or securities of any class, or securities convertible into or exchangeable for shares, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities (save for issues between Clydeport and any of its wholly-owned subsidiaries or between such wholly-owned subsidiaries and save for options as disclosed to Peel granted under the Clydeport Share Option Schemes before 18 November 2002 or the issue of any Clydeport Shares allotted upon the exercise of options granted before 18 November 2002 under the Clydeport Share Option Schemes) or redeemed, purchased, repaid or reduced or proposed the redemption, purchase, repayment or reduction of any part of its share capital or any other securities; (ii) recommended, declared, made or paid or proposed to recommend, declare, make or pay any bonus, dividend or other distribution whether payable in cash or otherwise, other than any distribution by or any wholly-owned subsidiary within the Clydeport Group; (iii) save as between Clydeport and its wholly-owned subsidiaries, effected, authorised, proposed or announced its intention to propose any change in its share or loan capital; (iv) save as between Clydeport and its wholly-owned subsidiaries, effected, authorised, proposed or announced its intention to propose any merger, demerger, reconstruction, scheme of arrangement, amalgamation or other similar scheme or any material acquisition or disposal or (other than in the ordinary course of business) transfer of assets or shares or any right, title or interest in any assets or shares; (v) acquired or disposed of or transferred (other than in the ordinary course of business, excepting from such ordinary course of business dealings in relation to development or investment land or property) or mortgaged, charged or encumbered any material assets or shares or any material right, title or interest in such assets or shares (other than in the ordinary course of business, excepting from such ordinary course of business doing any such thing in relation to development or investment land or property or any title or interest therein), or authorised the same, or entered into, varied, terminated or proposed or announced its intention to enter into, or vary or terminate any agreement, arrangement, contract, transaction or commitment (other than in the ordinary course of business and whether in respect of capital expenditure or otherwise) which is material in the context of the Offer and is of a loss-making, long term or unusual or unusually onerous nature or magnitude, or involves or could reasonably be expected to involve an obligation of such a nature or magnitude; (vi) entered into any agreement, contract, transaction, arrangement or commitment (other than in the ordinary course of business, excepting from such ordinary course of business dealings in relation to development or investment land or property) which is material in the context of the Offer; (vii) entered into any contract, transaction or arrangement which would be materially restrictive on the business of any member of the wider Clydeport Group or the wider Peel Group or which is or could involve obligations which would or might reasonably be expected to be so materially restrictive in each case to an extent material in the context of the Offer; (viii) issued, authorised or proposed the issue of or made any change in or to any debentures, or (other than in the ordinary course of business) incurred, or materially increased, any material indebtedness or liability, actual or contingent; (ix) admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased to carry on or threatened to cease carrying on all or a substantial part of its business; (x) made, or announced any proposal to make, any material change or addition to any retirement, death or disability scheme or any other employment-related scheme of or in respect of its directors, employees, former directors or former employees; (xi) save as between Clydeport and its wholly-owned subsidiaries or in the ordinary course of business granted any lease or third party rights in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property; (xii) entered into or varied or made any offer (which remains open for acceptance) to enter into or vary the terms of any service agreement with any director or senior executive of the wider Clydeport Group; (xiii) taken or proposed any corporate action or had any legal proceedings started or threatened against it for its winding up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets or revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction; (xiv) made any amendment to its memorandum or articles of association; (xv) waived or compromised any claim or authorised any such waiver or compromise, save in the ordinary course of business, which is material in the context of the wider Clydeport Group; or (xvi) agreed to enter into or entered into an agreement or arrangement or commitment or passed any resolution or announced any intention with respect to any of the transactions, matters or events referred to in this paragraph (e); (f) except as publicly announced by Clydeport prior to 18 November 2002 through the Company Announcements Office of the London Stock Exchange or other appropriate regulatory information service or as disclosed in writing by or on behalf of Clydeport to Peel or its advisers prior to 18 November 2002, since 30 June 2002: (i) there having been no material adverse change or deterioration in the business, assets, financial or trading position or profits of the wider Clydeport Group taken as a whole; (ii) no material litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the wider Clydeport Group is or may reasonably be expected to become a party (whether as claimant or defendant or otherwise), and no enquiry or investigation by or complaint or reference to any Third Party, against or in respect of any member of the wider Clydeport Group (in each case which is material in the context of the wider Clydeport Group taken as a whole), having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the wider Clydeport Group; and (iii) no contingent or other liability having arisen or become apparent or increased which might be reasonably likely in either case to have a material adverse effect on the wider Clydeport Group taken as a whole; (g) save to the extent disclosed by or on behalf of Clydeport to Peel or its advisers in writing prior to 18 November 2002 Peel not having discovered (i) that any financial, business or other information concerning Clydeport or the wider Clydeport Group which is contained in the information which has been publicly disclosed at any time by or on behalf of any member of the wider Clydeport Group (in the context of the Offer or otherwise) contains a misrepresentation of fact which has not, prior to 18 November 2002, been corrected by public announcement or omits to state a fact necessary to make the information contained therein not misleading, which in either such case is material in the context of the wider Clydeport Group taken as a whole or (ii) that any member of the wider Clydeport Group is subject to any liability, contingent or otherwise, which is not disclosed in the Annual Report and Accounts of Clydeport for the financial year ended 31 December 2001 or the statement of results for the six months ended 30 June 2002 which is material in the context of the wider Clydeport Group taken as a whole; (h) save to the extent disclosed by or on behalf of Clydeport to Peel or its advisers in writing prior to 18 November 2002, Peel not having discovered that: (i) any past or present member of the wider Clydeport Group has failed to comply with any and/or all applicable legislation or regulation of any jurisdiction in which it operates with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance reasonably likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission on or from any land or other asset now or previously owned, occupied or made use of by any past or present member of the wider Clydeport Group (whether or not the same constituted a non-compliance by any member of the wider Clydeport Group with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the wider Clydeport Group which is material in the context of the Offer; or (ii) there is, or is reasonably likely to be, any liability (actual or contingent) which is material in the context of the Offer on any past or present member of the wider Clydeport Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the wider Clydeport Group, under any environmental legislation, regulation, notice, circular or order of any Third Party; (i) nothing having occurred and no member of the wider Clydeport Group or any employee, director or agent of the wider Clydeport Group having done any thing or caused any thing to be done that has, will have or might reasonably be expected to have the effect of: (i) rendering any planning permission pending, granted or applied for in relation to Glasgow Harbour (a 'Planning Permission') invalid, or revokable by a Third Party or materially less likely to be granted; or (ii) imposing, or causing there to be imposed, upon any Planning Permission any condition which is onerous in the context of the expected timing and cost of Glasgow Harbour and which is attached to, or in replacement or substitution for, any condition contained in any such Planning Permission granted or pending; (j) Peel not having become aware that any condition attached to a Planning Permission granted or pending has become, or is reasonably likely to become, incapable of being satisfied within a time period that will not materially disrupt, interfere with, or materially increase the expected time and /or cost of Glasgow Harbour; and (k) Peel not having received written notification prior to the date when the Offer would otherwise have become unconditional in all respects that the Secretary of State for Trade and Industry has referred or intends to refer the proposed acquisition of Clydeport by Peel to the Competition Commission or that she would so refer or would intend to so refer such acquisition unless undertakings are given by Peel or Clydeport (or any member of the wider Peel Group, or the wider Clydeport Group) that are not reasonably acceptable to Peel; Peel reserves the right to waive all or any of conditions (b) to (k) inclusive, in whole or in part. The Offer will lapse if the proposed acquisition by Peel of Clydeport is referred to the Competition Commission before 3.00 p.m. on the first closing date of the Offer or the date when the Offer becomes or is declared unconditional as to acceptances, whichever is the later. In such circumstances, the Offer will cease to become capable of further acceptances and persons accepting the Offer and Peel shall cease to be bound by acceptances delivered on or before the date on which the Offer so lapses. Conditions (b) to (k) inclusive must be satisfied as at, or waived on or before, midnight on the 21st day after the later of the first closing date of the Offer and the date on which condition (a) is fulfilled (or in each such case such later date as the Panel may agree) failing which the Offer will lapse, provided that Peel shall be under no obligation to waive or treat as fulfilled any of conditions (b) to (k) inclusive by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that the other conditions of the Offer may at such earlier date have been fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment. Peel reserves the right to make such changes to the above conditions as may be necessary in the event that the conditions of the Offer are required to be amended to comply with Rule 9 of the City Code on Takeovers and Mergers. References to a 'substantial interest' in an undertaking or other enterprise and similar expressions shall be taken to refer to an interest of 20 per cent. or more of the voting rights exercisable in relation to the undertaking or enterprise concerned or in the capital or any class of capital of such undertaking or enterprise. APPENDIX II Sources and Bases of Information 1. General Unless otherwise stated financial information concerning the Clydeport Group and Peel Holdings has been extracted without material adjustment from the published audited annual report and accounts and, where appropriate, interim statements of the relevant group for the relevant period. 2. Share prices The price of a share on a particular date is the closing middle market price as derived from the Daily Official List of the London Stock Exchange Daily Official List. APPENDIX III Profit Forecast for the Clydeport Group for the year ending 31 December 2002 The Clydeport Directors forecast that, in the absence of unforeseen circumstances and on the bases of preparation and principal assumptions set out below, the profit before tax of the Clydeport Group for the year ending 31 December 2002 will be not less than Â£18 million. Bases of preparation and principal assumptions The above profit forecast is based upon management projections by the Clydeport Group, taking account of the unaudited interim report for the six months ended 30 June 2002, the unaudited management accounts for the four periods ended 25 October 2002 and management's forecast for the two periods ending 31 December 2002, and has been prepared using the Clydeport Group's accounting policies and on the following principal assumptions: (a) There will be no circumstances in which the Clydeport Group's customers, including TXU Europe Energy Trading Limited ('TXU Europe')*, will be prevented from fulfilling their commitments to the Clydeport Group. (b) The Clydeport Group's business will not be adversely affected by disruption to the railways or by any shortage of rolling stock. (c) There will be no material movement in commodity prices which adversely affects the Clydeport Group. (d) The contracts for the sale of two properties which are currently under negotiation will be completed, as expected, before 31 December 2002. (e) The contracts between GHL and each of the chosen developers for the first residential phase of Glasgow Harbour will become unconditional by 31 December 2002, as expected. (f) There will be no material changes in UK regulations or legislation which will adversely affect the Clydeport Group. (g) There will be no material changes in UK interest rates. (h) There will be no material industrial, commercial, economic or political disputes, abnormal weather conditions, or other interruptions adversely affecting the Clydeport Group, its operations or its customers. No account has been taken of the costs or expenses incurred or to be incurred in relation to the Offer. These costs will be recognised as an exceptional item in the published accounts of the Group for the financial year ending 31 December 2002. * On 14 October 2002, TXU Corporation ('TXU') announced that it will limit any necessary equity contributions to its European operations to minimal levels. On 21 October 2002, TXU announced that TXU Europe had agreed to sell 5.3 million gas and electric customers and 2.9 gigawatts of production in the UK to Powergen for a value of approximately US $2.9 billion. On that date TXU also announced that TXU Europe is negotiating with key creditor groups 'to promptly determine the feasibility of operating as a going enterprise for the benefit of its creditors'. Clydeport Operations Limited ('Clydeport Operations'), a wholly owned subsidiary of Clydeport, has a coal-handling contract with TXU Europe which runs until 31 December 2004 in terms of which Clydeport Operations handles, at its Hunterston Terminal, TXU Europe's imports of coal on certain contracted minimum and maximum tonnage bases. Clydeport Operations has a contractual lien over coal stocks of TXU Europe held at the Terminal. Clydeport confirms that neither it nor Clydeport Operations has had notice from TXU Europe that the coal-handling contract will not continue on its current terms. Letters relating to the profit forecast The following are the texts of letters received from Ernst & Young LLP, Deloitte & Touche Corporate Finance and Brewin Dolphin relating to the profit forecast of Clydeport set out in this Appendix III: (i) Letter from Ernst & Young LLP Ernst & Young LLP George House 50 George Square Glasgow G2 1RR The Directors Clydeport plc 16 Robertson Street Glasgow G2 8DS Deloitte & Touche Corporate Finance Lomond House 9 George Square Glasgow G2 1QQ Brewin Dolphin Securities Limited 48 St Vincent Street Glasgow G2 5TS 18 November 2002 Dear Sirs We have reviewed the accounting policies and calculations for the profit forecast of Clydeport plc and its subsidiaries ('the Group') for the year ending 31 December 2002 set out in Appendix III of the announcement dated 18 November 2002 ('Announcement'). The forecast, which has been prepared under the historical cost convention modified to include the revaluation of certain land and buildings and investments in subsidiaries, includes results shown in the unaudited interim statement for the six months ended 30 June 2002 and in the unaudited management accounts for the four periods ended 25 October 2002 and management's forecast for the two periods ending 31 December 2002. Responsibility The forecast and the Announcement in which it is included (to the extent stated therein) are the responsibility of the directors of Clydeport plc. It is our responsibility to form an opinion on the forecast and to report our opinion to you. Basis of opinion We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with reasonable assurance that the profit forecast, so far as the accounting policies and calculations are concerned, has been properly compiled on the basis stated. We conducted our work in accordance with the Statements of Investment Circular Reporting Standards issued by the Auditing Practices Board. Opinion In our opinion the profit forecast, so far as the accounting policies and calculations are concerned, has been properly compiled on the basis of the assumptions made by the directors of Clydeport plc set out in Appendix III of the Announcement, and has been prepared on a basis consistent with the accounting policies normally adopted by the Group. The work we carried out on the forecast was solely for the purpose of reporting to Deloitte & Touche Corporate Finance, to Brewin Dolphin Securities Limited and to the directors of Clydeport plc and hence to the existing members of Clydeport plc in relation to their existing shareholdings in that company. As a result, we assume no responsibility whatsoever to any person contemplating acquiring or increasing any holding of shares in Clydeport plc in respect of or arising out of or in connection with our work on the forecast. Yours faithfully Ernst & Young LLP The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member practice of Ernst & Young Global. A list of members' names is available for inspection at Becket House, 1 Lambeth Palace Road, London SE1 7EU, the firm's principal place of business and registered office. (ii) From Deloitte & Touche Corporate Finance Deloitte & Touche Corporate Finance Lomond House 9 George Square Glasgow G2 1QQ The Directors Clydeport plc 16 Robertson Street Glasgow G2 8DS 18 November 2002 Dear Sirs, We refer to the profit forecast of Clydeport plc ('Clydeport') and its subsidiaries for the year ending 31 December 2002 (the 'Clydeport Profit Forecast') which is set out in Appendix III of the announcement dated 18 November 2002. We have discussed the Clydeport Profit Forecast, its bases of preparation and the assumptions on which it has been prepared with the Clydeport Directors. We have also discussed the accounting policies and calculations adopted in arriving at the Clydeport Profit Forecast with Ernst & Young LLP, Clydeport's auditors, and we have considered their letter addressed to you, Brewin Dolphin Securities Limited and us relating to the Clydeport profit forecast. On the basis of these discussions, and having regard to the letter from Ernst & Young LLP, we consider that the Clydeport Profit Forecast referred to above, for which the Clydeport Directors are solely responsible, has been prepared after due and careful enquiry. Yours faithfully Deloitte & Touche Corporate Finance A division of Deloitte & Touche Principal place of business at which a list of partners' names is available: Stonecutter Court, 1 Stonecutter Street, London EC4A 4TR. Authorised by the Financial Services Authority in respect of regulated activities. (iii) From Brewin Dolphin Brewin Dolphin Securities Corporate Finance Division 48 St Vincent Street Glasgow G2 5TS The Directors Clydeport plc 16 Robertson Street Glasgow G2 8DS 18 November 2002 Dear Sirs, We refer to the profit forecast of Clydeport plc ('Clydeport') and its subsidiaries for the year ending 31 December 2002 (the 'Clydeport Profit Forecast') which is set out in Appendix III of the announcement, dated 18 November 2002. We have discussed the Clydeport Profit Forecast, its bases of preparation and the assumptions on which it has been prepared with the Clydeport Directors. We have also discussed the accounting policies and calculations adopted in arriving at the Clydeport Profit Forecast with Ernst & Young LLP, Clydeport's auditors, and we have considered their letter addressed to you, Deloitte & Touche Corporate Finance and us relating to Clydeport Profit Forecast. On the basis of these discussions, and having regard to the letter from Ernst & Young LLP, we consider that the Clydeport Profit Forecast referred to above, for which the Clydeport Directors are solely responsible, has been prepared after due and careful enquiry. Yours faithfully for and on behalf of Brewin Dolphin Securities Limited Alan G Stewart Director - Corporate Finance Brewin Dolphin Securities Limited incorporating Bell Lawrie White, Hill Osborne and Wise Speke. A member of the London Stock Exchange and regulated by the Financial Services Authority. Registered office: 5 Giltspur Street, London, EC1A 9BD. Registered in England No. 2135876. APPENDIX IV Summary of Clydeport Group's property valuations The normal accounting practice of Clydeport and the Joint Ventures is to revalue investment properties annually and to account for development properties at the lower of historic cost and net realisable value. In view of the significance of the Clydeport Group's property assets, before deciding whether or not to recommend the Offer, the Clydeport Board commissioned the Independent Valuers to estimate the current Open Market Value ('OMV') of both the Group's investment and development properties and its share of the OMV of such properties held by Joint Ventures*. OMV is an estimate of the best price at which the sale of an interest in property would have been completed unconditionally for a cash consideration on the date of the valuation, subject to stated assumptions. The OMV of the Group's investment and development properties and its share of the OMV of such properties within Joint Ventures* estimated by the Independent Valuers is approximately Â£18.6 million higher than their book value of Â£22.0 million as at 30 June 2002. Because of the scale of Glasgow Harbour, the Clydeport Board has, in addition, commissioned Montagu Evans to estimate Clydeport's interest in the Calculation of Worth ('CoW') of that development. Clydeport's interest in the CoW is an estimate of Clydeport's interest in the present value of the historic and estimated future cash inflows and cash outflows for Glasgow Harbour, up to the estimated time of sale of the last element of the proposed development. Clydeport's interest in the CoW for Glasgow Harbour is approximately Â£9.2 million over its OMV and Â£21.4 million over its book value of Â£5.3 million as at 30 June 2002. Following normal practice in professional property valuations, the OMV and CoW take account of the current outline planning consent subject to specific assumptions stated in the reports by the Independent Valuers. For Glasgow Harbour to be developed fully as currently envisaged, further planning consents will be required. In the event that such consents are received, the Clydeport Board would expect a further enhancement to the OMV and CoW of that development. * Excluding Clydeport's investment of Â£0.4 million in an investment property which was purchased by Clydeside on 23 October 2002. Table 1 below sets out the net book value of Clydeport's investment and development properties and its investment in Joint Ventures, as at 30 June 2002, together with the corresponding OMV of the investment and development properties held by Clydeport and its Joint Ventures*, as assessed by James Barr and Montagu Evans. Table 2 below sets out the net book value of Clydeport's investment in GHL, as at 30 June 2002, together with Clydeport's share of the CoW of Glasgow Harbour, as assessed by Montagu Evans. Table 1: Open Market Value compared to Book Value Book value as OMV Uplift at (note 2) 30 June 2002 (note 1) Â£'000 Â£'000 Â£'000 Investment properties 7,155 7,195 40 Property developments 2,987 9,430 6,443 Investment in Joint Ventures Share of GHL Property 15,829 27,974 (note 3) Other assets 4,413 4,413 20,242 32,387 Liabilities (20,445) (20,445) Net assets/(liabilities) (203) 11,942 Loans to GHL 5,500 5,500 Investment in GHL 5,297 17,442 12,145 Share of other Joint Ventures Property 20,292 20,233 Other assets 966 966 21,258 21,199 Liabilities (20,333) (20,333) Net assets 925 866 Loans to other Joint Ventures 5,621 5,621 Investment in other Joint Ventures 6,546 6,487 (59) Investment in Joint Ventures 11,843 23,929 Total of Clydeport's investment & development 21,985 40,554 (note 4) 18,569 properties and its investment in Joint Ventures Notes: 1. The net book value of Clydeport's investment properties as at 30 June 2002 has been extracted from Clydeport's annual report for the year ended 31 December 2001, as their net book value did not change from 31 December 2001 to 30 June 2002. The net book value of Clydeport's property developments has been extracted from the unaudited interim report of Clydeport as at 30 June 2002. The net book value of Clydeport's investment in the Joint Ventures as at 30 June 2002 has been derived from the unaudited management accounts of the Joint Ventures. 2. This column reflects the OMV of Clydeport's investment and development properties and its share of the OMV of such properties held by the Joint Ventures extracted from the external OMV valuation reports of James Barr and Montagu Evans which will be set out in the Offer Document. 3. This figure is Clydeport's share of the OMV of Glasgow Harbour, as will be set out in the external CoW valuation report of Montagu Evans, which will be set out in the Offer Document. 4. There have been no acquisitions or disposals of property by Clydeport or the Joint Ventures since 30 June 2002, other than Clydeport's investment of Â£0.4 million in an investment property which was purchased by Clydeside on 23 October 2002 (which has been excluded from the OMV calculation). * Excluding Clydeport's investment of Â£0.4 million in an investment property which was purchased by Clydeside on 23 October 2002. Table 2: Clydeport's interest in the Calculation of Worth of Glasgow Harbour Book value as at CoW Uplift 30 June 2002 (note 2) Â£'000 (note 1) Â£'000 Â£'000 Investment in GHL Share of GHL Property 15,829 Other assets 4,413 20,242 Liabilities (20,445) Net assets/(liabilities) (203) 21,168 (note 3) Loans to GHL 5,500 5,500 Investment in GHL 5,297 26,668 21,371 Notes: 1. This column has been extracted from Table 1 set out above. 2. This column reflects Clydeport's share of the CoW of Glasgow Harbour, as set out in the external CoW valuation report by Montagu Evans which will be set out in the Offer Document. This represents an uplift of Â£21.4 million in the value of Clydeport's investment in GHL (as at 30 June 2002) and an uplift of Â£9.2 million in the value of Clydeport's investment in GHL over the OMV of development property held by GHL, as set out in the Table 1 above. 3. This figure is Clydeport's share in the CoW of Glasgow Harbour, which will be set out in Part D of Appendix V to the Offer Document. Potential tax liability at OMV In the event of a sale at OMV of all the investment and development properties of Clydeport and of its Joint Ventures*, the estimated tax payable by Clydeport, and its share of the estimated tax payable by its Joint Ventures*, would be as follows: Â£'000 Deferred tax provided (note 1) 199 Deferred tax unprovided (as at 30 June 2002) (note 2) 760 Deferred tax on the uplift based on the OMV (note 3) 5,571 6,530 Notes: 1. Deferred tax provided has been extracted from the annual report of Clydeport Properties Limited for the year ended 31 December 2001 and relates to capital allowances in advance of depreciation on its investment properties. 2. Deferred tax unprovided is the aggregate of the deferred tax unprovided as at 31 December 2001 (extracted from Clydeport's annual report for the year ended 31 December 2001) and Clydeport's share of the estimated tax liability on property acquired by GHL since that date (assuming a 30 per cent. tax charge on the excess of the 30 June 2002 value over the allowable indexed tax base cost). 3. Deferred tax on the uplift over book value in the value of Clydeport's investment and development properties and its investment in Joint Ventures, based on the OMV referred to in Table 1 above, assumes a tax charge of 30 per cent. The actual tax payable will depend on, inter alia, the timing and method of disposals, the actual proceeds received and the applicable tax legislation at that time. * Excluding Clydeport's investment of Â£0.4 million in an investment property which was purchased by Clydeside on 23 October 2002. APPENDIX V Definitions The following definitions apply throughout this document, unless the context requires otherwise: '1994 Scheme' the Clydeport Executive Share Option Scheme 1994 '1998 Schemes' the Clydeport Unapproved 1998 Company Share Option Plan and the Clydeport Inland Revenue Approved 1998 Company Share Option Plan 'Act' the Companies Act 1985, as amended 'Australia' the Commonwealth of Australia, its possessions, states and territories and all areas subject to its jurisdiction and any political sub-division thereof 'BoS' the Governor and Company of the Bank of Scotland 'Brewin Dolphin' Brewin Dolphin Securities Limited 'Canada' Canada, its possessions, provinces and territories and all areas subject to its jurisdiction and any political sub-division thereof 'City Code' the City Code on Takeovers and Mergers 'Closing Price' the closing middle market price as derived from the Daily Official List of the London Stock Exchange 'Clydeport' or 'Company' Clydeport plc 'Clydeport Board' the board of directors of Clydeport 'Clydeport Directors' JL Millar CBE, TE Allison, GH Crombie, DS Green, AS Hunter, PT Lawwell and RJ Middleton 'Clydeport Group' or 'Group' Clydeport and its subsidiary undertakings 'Clydeport Share Option Schemes' the 1994 Scheme, the SAYE Scheme and the 1998 Schemes 'Clydeport Shareholder' or ' a holder of Clydeport Shares Shareholder' 'Clydeport Shares' or 'Shares' ordinary shares of 5p each in the capital of Clydeport currently in issue and any further such shares which have been unconditionally allotted or issued fully paid before the date on which the Offer closes (or such earlier date as Peel may, subject to the City Code, determine) 'Clydeside' Clydeside Investment Properties Limited 'CoW' Calculation of Worth 'Deloitte & Touche Corporate Finance' Deloitte & Touche Corporate Finance, a division of Deloitte & Touche 'Form of Acceptance' the form of acceptance, authority and election relating to the Offer and the Loan Note Alternative 'FSA' Financial Services Authority 'Japan' Japan, its cities and prefectures, territories and possessions 'GHL' Glasgow Harbour Limited 'Glasgow Harbour' the Glasgow Harbour development 'Independent Valuers' James Barr and Montagu Evans 'James Barr' James Barr, Chartered Surveyors 'Joint Ventures' Clydemore Properties Limited, Clydeside, Ensenada Properties Limited, GHL and CLYDEboyd (Fort William) Limited 'LIBOR' London Interbank Offered Rate, meaning the arithmetic mean (rounded up to the nearest five decimal places) of the offered quotations in sterling for deposits of Â£10,000,000 which are quoted as of 11.00 a.m. on the 'LIBP' page on the Reuters Monitor Money Rate Service on the first day of the Interest Period on which quotations would ordinarily be given by prime banks in the London Interbank Market for deposits of sterling for delivery on the first day of that period 'Loan Note Alternative' the alternative whereby eligible Clydeport Shareholders validly accepting the Offer may elect to receive Loan Notes in lieu of all or part of the cash consideration to which they would otherwise be entitled under the Offer, up to a maximum aggregate of Â£131 million 'Loan Note Instrument' the instrument by which the Loan Notes will be constituted 'Loan Notes' guaranteed unsecured floating rate loan notes to be issued by Peel pursuant to the Loan Note Alternative 'London Stock Exchange' London Stock Exchange plc 'Montagu Evans' Montagu Evans, Chartered Surveyors 'Offer' the recommended cash offer by Rothschild on behalf of Peel to acquire all the Clydeport Shares (other than those already owned by Peel Holdings) on the terms and subject to the conditions set out in this document and in the Form of Acceptance including, where the context admits, any subsequent revision, variation, extension or renewal thereof and including, where the context requires, the Loan Note Alternative 'Offer Document' the document dated 18 November 2002 setting out the terms and conditions of the Offer 'Offer Period' the period commencing on 18 November 2002 until whichever of the following dates shall be the latest: (a) 9 December 2002; (b) the date on which the Offer lapses; and (cc) the date on which the Offer becomes unconditional 'Official List' the Official List of the UKLA 'OMV' Open Market Value 'Overseas Shareholder' Clydeport Shareholders who are resident in, or nationals or citizens of, jurisdictions outside the United Kingdom or who are nominees of, or custodians, trustees or guardians for, any such residents, citizens or nationals 'Panel' The Panel on Takeovers and Mergers 'Peel' Peel Ports Limited, a wholly-owned subsidiary of Peel Holdings 'Peel Group' Peel Holdings and its subsidiaries 'Peel Holdings' Peel Holdings p.l.c 'RBS' The Royal Bank of Scotland Plc 'Rothschild' N M Rothschild & Sons Limited 'SAYE Scheme' the Clydeport Inland Revenue Approved Savings Related Share Option Scheme 1994 'subsidiary' and 'subsidiary have the meanings given to them in the Act (save where otherwise undertaking' stated) 'Tokenhouse Investments SRBP' Tokenhouse Investments Limited Staff Retirement Benefits Plan 'UKLA' or 'UK Listing Authority' the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 and in the exercise of its function in respect of the admission of securities to the Official List 'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland 'USA' the United States of America, its territories and possessions, any state of the United Sates of America and the District of Columbia and all other areas subject to its jurisdiction This information is provided by RNS The company news service from the London Stock Exchange

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